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Bloomberg is reporting that Argentina will send a bill to Congress to take a 51 percent stake in the company. The stake in YPF would give the government access to shale oil reserves. Argentina is believed to have 23 billion barrels of oil and YPF owns 13 billion of those barrels.

The government has claimed for a while that YPF hasn't invested enough its local oil fields, and that it hasn't done enough to boost output. It has also stripped YPF of some of its leases to the biggest oilfields in the country.

Spanish oil giant Repsol has a 57.43 percent stake in YPF, and YPF represents 42 percent of Repsol's total reserves. Repsol's chairman Antonio Brufau has asked the Argentine government to enter into talks with the company.

UPDATE

Argentinian president Cristina Fernandez has proposed a bill to nationalize YPF which is controlled by Spain's Repsol, despite strong Spanish opposition to the move. The Argentinian state expects to take a 51 percent stake of Repsol's 57.43 percent stake in YPF. Argentina's 23 provinces and Buenos Aires city will hold the remaining 49 percent stake. Argentina risks alienating foreign investors with this move and its unclear how this would affect its relations with Spain, Argentina's biggest foreign investor.

Buenos Aires Herald quoted Spanish economy minister Luis de Guindos saying this "would only generate the sensation that Argentina is, once again, lost in the throes of populism."

A Spanish official from the prime minister's office has said that Spain will respond to Argentina's decision to take control of YPF. The official told Bloomberg that "Spain understands that defending companies’ interests and their legal security abroad is part of the national interest."

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